Three reasons finance should focus more on business intelligence

Many organisations recognise the value in harvesting data, whether the information is about customers’ buying habits or workers’ performance measures. But some of those companies haven’t been able to tap into the full potential of business intelligence, ie, getting the right information from the data to make better business decisions.

Donny Shimamoto, CPA/CITP, CGMA, believes finance should own the business intelligence role – for the good of accountants and the good of the organisation.

Here are three reasons finance should take over business intelligence, according to Shimamoto, founder of IT consulting firm Intraprise TechKnowlogies, who presented at the American Institute of CPAs Financial Planning & Analysis Conference this week in Las Vegas:

• Information is everywhere, but it often lacks relevance, clarity and accuracy: Surveys bear this out. Twenty-eight per cent of senior finance executives said they had little or no information to predict the performance of their business in 2013, and another 54% said they had only half the information needed to provide visibility into performance, according to a recent Accenture survey. A recent Gartner report says that businesses are “still struggling to make progress with [business intelligence] and analytics.”
• Confidence about information is high when it comes from accountants: Satisfaction is lower regarding information supplied by some other departments. “The role of the accountant as a purveyor of truth and as an attester to the quality of the information has become increasingly important,” Shimamoto said.
• The rise in analytics represents an opportunity for finance to shift towards a role of business partner: The finance function has earned trust, but more for the role of watchdog and less for analytical insight. Accountants “can go beyond traditional cost control and start to evolve the role to be looking at the organisation as a whole and discussing how to best optimise the performance,” Shimamoto says.

In his presentation, Shimamoto broke down the role of accountants into four quadrants. The top left is the most traditional – the steward/controller role, which is primarily for reporting and transaction processing. The trusted reporter role, the lower-left quadrant, encompasses duties such as US Sarbanes-Oxley Act compliance, IFRS and GAAP.

The third role, the lower-right quadrant, shifts into more technical expertise. “These are people that are really strong in supporting specific functions,” Shimamoto said. “They might have industry expertise or experience in activity-based costing or treasury management.”

The fourth role, in the top-right quadrant, is the one to which Shimamoto hopes finance can ascend. “Finance is the key to help unlock the power of business intelligence,” he said.

Traditionally, if others didn’t speak the language of IT, they were hesitant to learn. That hesitance is one reason accountants haven’t gotten as involved in the application of business intelligence to company decisions.

Accountants today don’t need to fret about learning business intelligence thanks to an improvement in BI tools, Shimamoto says. “The tools have evolved to become so user-friendly that you don’t need IT to help get the information,” he said. “It’s evolved now so finance can do it all on [its] own. That’s a huge change within the last decade.”

If accountants are willing to escape their comfort zone, they can move out of those left quadrants and into a more strategic position in their companies, Shimamoto said.

“We’re seeing where management accountants are already used to reporting on information on a regular basis,” Shimamoto said. “Now as we’re looking at overall integrated reporting, reporting on sustainability, reporting on ethics, all are now coming into greater importance and increased focus. So as organisations are capturing data on all these additional topics, that’s where the skills that finance has can start to be applied.”

Related CGMA Magazine content:

“Why More Data Does Not Guarantee Better Business Decisions”: While the amount of data that companies collect can be good for business, the numbers themselves are not a guarantee of success. Human expertise is needed to parse the data.

“Three Lessons in Managing Supply-Chain Data”: Aidan Goddard, FCMA, CGMA, the CFO and COO of L’Occitane en Provence’s Asia-Pacific operations, explains how Big Data, when harnessed, can help a company cut costs and inform sales and marketing strategies, and how finance figures in.

“The Secrets of Measuring and Managing Business Performance”: Twenty years after the introduction of the Balanced Scorecard, performance management expert Bernard Marr explains the differences between companies that merely compile data and those that thrive from it.

—Neil Amato (namato@aicpa.org) is a CGMA Magazine senior editor.